Weighing the Options of Refinancing
 |
 |
 |
In the market for a mortgage? We can help! Give us a call at (207) 571-8034. Want to get started? Apply Here.
|
|
|
|
|
Some have said that only in the case your new interest will be at least two points lower, should you refinance your loan. Perhaps that was sound advice a number of years ago, but as refinance costs have been getting lower, it may be a good time to take a serious look. Refinancing has a number of advantages that will often make it worth the up-front cost several times over.
Benefits
You may be able to lower your interest rate (sometimes by a lot) and make smaller mortgage payments with your refinanced mortgage. You also may be given the option of tapping into your home equity by "cashing out" some funds to fix up your home, consolidate debt, or take your family on a vacation. You could be able to refinance into a shorter-term mortgage program, giving you the ability to add to your equity faster.
Expenses and Fees
As you probably know, you will have to pay for the the refinance process. You'll be charged the same kinds of fees as you did with your current mortgage loan. Among these can be settlement costs, appraisal fees, lender's title insurance, underwriting fees, and so on.
Doing the Math
You might investigate paying points to be given a better interest rate. When you pay (on average) three percent of the mortgage loan amount initially, your savings for the life of the new loan can be substantial. Please talk to a tax professional before acting on hear-say that any paid points may be deducted on your federal income taxes.
Speaking of taxes, when your interest rate is reduced, it follows that you'll also be lowering the interest amount that you will be able to deduct on your taxes. This is one more cost that some borrowers take into consideration. We can help you do the math! Call us at (207) 571-8034.
All things considered, for most borrowers the total of up-front costs to refinance will be paid back soon in savings each month. We can help you explore your options, considering the effect a refinance could have on your taxes, how likely you might be to sell in the next couple of years, and your available cash. Call us at (207) 571-8034 to get started.
Curious about refinancing? Give us a call at (207) 571-8034.